STR: Hotel Construction Pipeline Shrinks but Planning Activity Increases
STR, Hendersonville, Tenn., reported hotel rooms under construction fell from one year ago, but noted properties in the planning stage increased significantly.
Hotel guest rooms underway fell 15.7 percent year-over-year to 154,881, STR said. Meanwhile, rooms in the planning stage jumped more than 25 percent since March 2021 to 297,000.
“While a steady hotel construction decline continues nationally, volume in New York City and Nashville represents a significant percentage of those markets’ existing supply,” STR said. “Additionally, planning activity continues to rise nationally with markets like Miami, Phoenix and San Francisco showing increased interest from developers.”
Detroit and Miami ranked third and fourth in rooms in construction as a percentage of existing supply, the report said.
“New York City has led the development pipeline for quite some time,” said Carter Wilson, STR Senior Vice President of Consulting. “Most of these rooms have been in development since before or right at the beginning of the pandemic, and the hope is their opening will be met with solid levels of recovery in international arrivals, groups and business travelers in addition to continued high levels of domestic leisure travelers.”
In the planning phase, Miami has the highest number of rooms as a percentage of existing supply, followed by Nashville, Phoenix and San Francisco/San Mateo.
“It is no surprise that Miami and Phoenix are showing increased rooms in the planning phase, as both markets have been outperformers throughout the pandemic,” Wilson said. “On the other hand, there’s San Francisco, which has consistently been near the bottom when looking at pandemic performance. The market’s strong positioning in the pipeline seems to imply developer confidence in the return of business and group demand.”